Surprise greets merger talk between rivals

CLSA’s John Kim set the cat among the pigeons yesterday with a research note weighing up the pros and cons of a
Stockland
and
Charter Hall
Group merger.

The speculation comes as the market awaits the appointment of a replacement to
Matthew Quinn
, who has headed the developer for the past 12 years.

Charter Hall’s joint managing director,
David Southon
, has been mooted as a possible successor and in his note, titled “Two Birds, One Stone", Mr Kim reasoned that such a move “raises the possibility" Stockland will acquire its rival.

He argued the deal would transform the country’s largest residential developer into a “leader in property funds management, while providing [Charter Hall] with enhanced opportunities".

According to Mr Kim shareholders might be persuaded if the merger was struck at $4.05, a 31 per cent premium to Charter Hall’s last close.